A Comparative Study on Policy Instruments for Achieving the Kyoto Target in the US, Europe and Japan

Transcription

1 A Comparative Study on Policy Instruments for Achieving the Kyoto Target in the US, Europe and Japan Yoshiki Ogawa, Professor the Faculty of Economics, Toyo University 27 th USAEE/IAEE North American Conference Houston, Sept. 17, 2007

2 Contents of Report 1. Analysis on Factors Affecting Energy- and Industry-related CO2 Emissions 2. Changes in GHG Emissions by Sector since 1990 (Base Year) Based on National GHG Inventory 3. Comparison of Policy Measures on Global Warming Between EU-15 and Japan 4. Concluding remarks

3 1. Analysis on Factors Affecting Energy- and Industry-related CO2 Emissions

4 CO2 Emission and Four Components C= (CO2/E)*(E/GDP)*(GDP/P)* P = U * S * G * P C = CO2, U = CO2 /E, S = E/GDP, G = GDP/P (dc/c) = (du/u) + (ds/s) + (dg/g) + (dp/p) dc = (C/U) * du (the item on fuel switching) + (C/S) * ds (the item on energy conservation) + (C/G) * dg (the item on economic growth) + (C/P) * dp (the item on population growth) Calculate cumulative summation of each item

5 Results on CO2 emissions of EU-15 (1971 CO2 =100, %) EU 15 Economic Growth Population Growth Total CO2 Fuel Switching Energy Conservation 1990 Base

6 Results on CO2 emissions of Japan (1971 CO2 =100, %) Japan Economic Growth 60 Total CO Population Growth 1990 Base Fuel Switching -40 Energy Conservation

7 100 Results on CO2 emissions of USA (1971 CO2 =100, %) 80 USA Economic Growth Population Growth 20 0 Total CO Base -20 Fuel Switching Energy Conservation

8 Changes in Factors Affecting CO2 Emissions ($1000/capita) (g-oe/$) (ton-co2/toe) 40 GDP/P 0.45 E/GDP CO2/E USA USA Japan USA EU EU Japan Japan 2.2 EU

9 Average Annual Change Rates of Individual Component CO 2 CO 2 Emission CO 2 /E Fuel Switching E/GNP Energy Efficiency GNP/P Economic Growth P Population EU Japan USA

10 Specific Characteristics in Factors Emissions EU CO 2 emission: almost leveled off but slightly increased recently -- Population: almost leveled off and small increase contribution -- Economic growth: the largest factor for increasing emissions -- Energy saving, fuel switch especially to NG: offset increase Japan -- CO 2 emission: slowdown in increase since 1990 (Base year) -- Population: almost leveled off after Economic growth, ene. saving: small plus contribution after Fuel switch especially to nuclear and NG: offset increase partly USA -- CO 2 emission: showed a steady increase after Population: a certain increase contribution due to immigrants -- Economic growth: steady plus contribution due to IT bubble -- Energy saving: large offset of increase, fuel switch: small offset

11 2. Changes in GHG Emissions by Sector since 1990 (Base Year) Based on National GHG Inventory

12 Changes in GHG Emissions by Sector in EU-15 (M ton-co2) EU 15 Energy & Industry CO2 Total 100 R&C Transport Ene. Industry Industry GHGs Other CO2 and Other GHGs

13 Changes in GHG Emissions by Sector in Japan (M ton-co2) 150 Japan Energy & Industry CO2 Total 100 R&C CO2 50 Transport CO2 0 Ene. Industry CO2 Industry CO2 GHGs Total Other CO2 and Other GHGs

14 Changes in GHG Emissions by Sector in USA (M ton-co2) USA GHGs Total Energy & Industry CO2 Total 800 Other CO2 and Other GHGs 600 Transport CO R&C CO2 Industry CO2 Ene. Industry CO

15 Specific Characteristics in Sectoral GHG Emissions EU-15 (Kyoto Target: -8%, -320 Mt) -- GHG: down to -200 (93-02) but up to -100 (03-04) -- E&I CO 2 : down to -100 (93-94) but up to +150 (03-04) -- Increase factor: CO 2 in transport (95-99) and power plant (00-04) Decrease factor: waste CH 4 and CFC (freon) Japan (Kyoto Target: -6%, -75 Mt) -- GHG: up to +80 (94), down to (98-01), up to +70 (02-04) -- E&I CO 2 : steady up to +130 (02-04) except recession (93, 98, 01) -- Increase factor: CO 2 in transport (90-97), power plant (99-04) and R&C (90-04) Decrease factor: Agriculture CH 4 and CFC (freon) USA (Left from Kyoto Protocol since 2001) -- GHG: up to +850 (96-99) and then again up to (04) (+20%) -- E&I CO 2 : steady up to +950 (04) in straight line (+18%) -- Increase factor: CO 2 in transport (90-04) and power plant (90-00) Decrease factor: Land use change CH 4 and N 2 O mainly

16 3. Comparison of Policy Measures on Global Warming Between EU-15 and Japan

17 Policy Measures Adopted by EU (EC) Tax for GHGs Measures North European Countries Germany, Italy and UK Policy Mix: Denmark Voluntary Actions, Agreements Germany etc. Agree: Germany Policy Mix: UK Domestic E. Trading Denmark Kyoto Mechanism Netherlands Proposal on Common Carbon Tax Directive on Minimum Tax Rate on Energy Tax Renewable Energy Directive, CHP Directive, Energy Saving Directive etc.

18 Recent Prospects on GHG Emissions in EU (Source) COM (2005) 655 Final EU-15 emissions EU-25 emissions Yellow signal to EU Kyoto target Business as Usual EU-15 exist. measures EU-15 add. measures EU-25 exist. measures Emission trading including East Europe Aiming to make unified actions by EU Target + KYM EU-15 Target EU-25 add. measures Allowance and Actual (2005) Country Allowance Actual Germany France Czech Finland Netherlands Slovak Denmark Belgium Portugal Greece Austria Italy Spain UK Total

19 Policy Measures on Global Warming Adopted by EU-15 EU members tried various policy measures from earlier -- Environment tax, voluntary agreements, and domestic ET -- Several countries adopted the mix of policy measures -- EC failed to introduce common carbon tax (1992) -- EU directives on energy saving, renewable energy and CHP Recent EU-15 GHG from decrease to level-off or increase -- EU GHG emissions increased since 2000 due to Energy CO 2 -- Especially CO 2 in transport and power due to steady economy -- Difficult to achieve Kyoto Target by EU-15 domestic options -- On the other hand, planned to expand members from 15 to 25 EU Emission Trading Scheme is an important option now -- EU discussed and determined EU-wide emission trading scheme -- Also discussed the utilization of Kyoto Mechanism -- EU-15 emission will be +250 Mt from Kyoto Target in New 10 members to EU can offset this excess using Hot Air

20 Ground Design for Kyoto Target in Japan up/ down from 1990 level (%) % up Energy derived Industry: 8.6% down R & C: 10.7% up from 1990 Transpoet: 15.1%up Non-energy derived & Alternative flon 6 Transport 0.6% up Achiving Kyoto Target 4 2 Resid & Commeci 3.1% down 0.6% up 6.6% down Industry 5.4% up Non-energy derived Sink -6 Alternative flon -8 Kyoto Mechanism Break Total Break Total Break Total Break Total Break Total Break Total 2003 Actual 2010 Trend 2010 Target 2003 Actual 2010 Trend 2010 Target (Source) made from Prime Minister Office [2005]

21 Issues on Energy Policy Measures of in Japan Energy saving can achieve necessary CO2 reductions? Voluntary action plan in industry. Economic recovery? Increases in R&C and transport. The problem is how to use. Large downward revision of nuclear introduction Increasing opposition movement to nuclear power plant. Electricity demand which begin to show a saturation trend. Renewable energies which cannot play a major role. Various issues (potential, fluctuations, and economics) Expected maximum share of 3% in primary energy in 2010 Natural gas which will not increase in absolute volume. Higher LNG price. Suitable power mix. End of NG switching. Influences of energy saving. Not volume but just share increase Environment tax by which reduction cannot be expected. Freezing of higher energy price in Asia No large demand reduction by skyrocketing since 2004

22 Recent Movements on CO 2 Emission Trading M of Env. Voluntary-type domestic CO 2 trading market. 32 participants (MGC etc) in the last year. Start trading April new participants (Suntory, Victor etc) in this year. Total 70. Subsidy from M of Env. to GHG measures by participants. Large emitters such as power, oil and steel industries Forced emission regulations worried by Keidanren. METI Preparing credit acquisition system. Discussing this system in the committee on market mechanism Direct acquisition, purchase from project executor, purchase of trading credit. Purchaser: NEDO AAU(ET), ERU (JI), CER (CDM), RMU (sink) Japan is the largest buyer of emission right (by WB) Japan got 38% of credits from Jan to Mar UK (15%), Italy (11%). Seller: China 66%, Brazil 11%.

23 4. Concluding remarks

24 Concluding Remarks Specific characteristics in GHG emissions or CO 2 emissions are quite different among USA, EU-15 and Japan. Thus, simple allocation of total reduction percentage (top-down approach) is not a suitable method. From 1995 to 2000, the abolishment of CFC had a large effects on reducing GHG emissions but CO 2 emissions related energy and industry has not reduced as expected in all of USA, EU-15 and Japan. Even EU, CO 2 emission will be possible to increase. Kyoto Mechanism (ET, JI and CDM) will play a more important role to reduce GHG emissions including CO 2 emissions. We should pursue more efficient and smart use of Kyoto Mechanism.